Oil and gas companies put thousands of dollars every year into New Mexico’s political campaigns, on both sides of the aisle, seeking to influence policy to protect continued growth in the industry that represents about a third of the state’s budget.
That amounted to about $1.1 million in political contributions between Oct. 5, 2021 and April 4, per a report from New Mexico Ethics Watch, leading up to the 2022 Mid-term Election.
The latest chunk of change came in a year when New Mexicans could choose a new governor, and the three top candidates in that race were the state’s biggest recipients of oil and gas’ dollars.
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Mark Ronchetti, a former weatherman seeking the GOP nomination for governor got the most with $300,000 coming to his campaign from oil and gas during the latest six-month reporting period, read the report, followed by Republican State Rep. Rebecca Dow with $122,000.
While Republicans are typically viewed as the party with more support for oil and gas, Democrat incumbent Gov. Michelle Lujan Grisham was the third-highest recipient of oil and gas money in the state, the report read, with about $60,000.
That means gubernatorial candidates got about $500,000, almost half of the $1.1 million provide by oil and gas as the industry sought a seat at the table in the race for New Mexico’s highest-ranking political office.
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“The oil and gas industry plays an outsized role in the economic fortunes of New Mexico, and we believe citizens need to be aware of the industry’s continuing influence upon our public officials,” said Ethics Watch Executive Director Kathleen Sabo.
Spokesperson for Lujan Grisham’s campaign Kendall Witmer denied that campaign donations from the oil and gas industry impacted the governor’s decision making, touting Lujan Grisham’s record on environmental policy and
“Governor Lujan Grisham’s commitment to New Mexico is evidenced by her tireless work to make New Mexico a leader in economic growth by supporting legacy industries and investing in new ones, leading the nation in tackling climate and clean energy technologies, and investing resources in local communities,” Witmer said.
“Campaign donations have no effect on policy and to imply otherwise is a disservice to the groundbreaking work made by the Governor, local public officials, industry leaders, and communities.”
Overall, about 70 percent of oil and gas contributions went to Republicans, per the report, compared with 60 percent paid to the party in 2020.
That money came from some of the biggest oil companies in the world, records show, as they focus on the prolific Permian Basin in the southeast corner of New Mexico amid global supply shortfalls on the heels of Russia’s invasion of Ukraine and growing demand as the COVID-19 pandemic appeared to subside.
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Chevron led with $71,000 in campaign contributions between October 2021 and April 2022, followed Artesia-based Santo Petroleum with $66,000.
Occidental Petroleum was third with $60,413 in contributions, the report read, and ExxonMobil was fourth with $60,000.
Other top contributions from the oil and gas industry were JR Water Transfer’s $50,000, NextEra Energy Resources’ $41,500 and $37,850 from ConocoPhillips.
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Another $36,200 came from Devon Energy, followed by $35,800 from the Trust of John A. Yates, founder of Yates Petroleum, and Marathon Oil Company with $30,000, per the report.
Political Action Committees associated with oil and gas contributed another $51,000 to the state’s political campaigns, per the report, while receiving about $260,000 from the industry.
About $135,000 of that was donated, the report read, to the New Mexico House Republican Campaign Committee.
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In 2020, Ethics Watch reported New Mexico was the fifth-largest recipient of contributions from the industry.
Oil county Republicans support oil and gas’ role in state politics
State Sen. David Gallegos of Eunice, along New Mexico’s eastern border to Texas in Lea County of the oil-rich Permian Basin region, said the industry deserves the influence it pays for as a major driver of the state’s economy.
“They’re a large donor to the state as a whole. What we do to oil and gas hurts everyone,” he said. “I think it’s fair. We determine the fate of their industry, or their demise. They’re a major player in the room, and they deserve a major seat in the room.”
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Gallegos said he was concerned the industry’s backing of Democrat candidates might not get the return he said oil and gas hoped for.
“If you butter both sides of the bread, someone’s hands get dirty,” he said. “I think they (oil and gas) are trying to put an investment in to protect themselves. I don’t think it’s really worked. On the Republican side, we know the value of oil and gas.”
Artesia State Rep. Jim Townsend of Eddy County also in the Permian pointed to economic prosperity and jobs created by oil and gas in New Mexico, arguing it’s interests should represented as they mirror those of many New Mexicans.
“You’re talking about an industry that provides almost half to the state gross domestic product. It is a significant industry,” Townsend said. “Oil and gas is a significant employer. The jobs of representatives and employers are to represent their districts.
“We are very fortunate to live in an area that is blessed with bountiful resources. We don’t have anything else that back-fill that.”
Is oil and gas threatened by government policy?
Critics of the industry questioned if the value oil and gas brought into New Mexico’s economy would truly be harmed by recent policy decisions.
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A report authored by New Mexico economist Kelly O’Donnell analyzed the impact recently proposed reforms on federal oil and gas policy would have on the state’ revenue.
When he took office in 2019, the administration of President Joe Biden placed a moratorium on new federal oil and gas leases, nationwide as the Department of the Interior conducted a review of its fossil fuel programs.
In the years since, the DOI implemented policy shifts to account more for environmental and climate change impacts of extraction on public land.
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About half of New Mexico’s oil and gas operations occur on federal land, and industry leaders were widely critical of the federal policy as threatening the state’s economy and its role in the nation’s energy security.
But O’Donnell in the report argued such policy shifts would have no bearing on oil and gas prices, which drive production and revenue to the state.
Most of the provisions only apply to new leases, the report read, and 90 percent of New Mexico’s federal leases or already in production, meaning any changes were unlikely to impact present operations.
An increase of federal royalties companies pay on their operations from 12.5 percent to 16.67 percent, O’Donnell said, would also only apply to new leases and have a “negligible” effect on production costs.
“Congress and the Department of Interior are weighing a variety of reforms that could impact operators on federal land in New Mexico, however, my analysis shows these impacts would be minimal to state revenue,” O’Donnell said.
“Despite claims by the industry and its allies, these reforms will have no impact on gas prices and pose little threat to oil and gas production in New Mexico, which is expected to continue rising in the coming decade.”
Adrian Hedden can be reached at 575-628-5516, firstname.lastname@example.org or @AdrianHedden on Twitter.